By Jesse Marx
By Chris Parker
By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
On Wall Street, "union shop" just means "impediment to cost-cutting."And what's true on Wall Street is increasingly what's true in the McClatchy boardroom as well. Some longtime newsroom vets have had the feeling for several years now that McClatchy was moving to kill the union. They claim the company has slowly but steadily ratcheted up its challenges to Newspaper Guild members by means such as flouting work rules (union members filed just 12 grievances against the company in the eight-year period from 1995 through 2002—and 23 more in the four years since) and forcing grievances to arbitration rather than trying to settle them.
When an arbitrator ruled against the paper on its use of non-Guild writer Paul Douglas, the WCCO weatherman, in March 2005, management spent more than a year appealing the decision in court. After losing in federal court, they appealed for a second time, in Eighth District Circuit Court, where they eventually lost again, in June 2006. Last fall, half a dozen reporters withheld their bylines from a series on ethanol to protest the editing of the series by a non-Guild employee. McClatchy's distaste for Guild newsroom was made manifest last summer when execs picked the 12 Knight Ridder papers they would resell. The list included all but one of the unionized newsrooms KR had owned. In dumping the Star Tribune, Pruitt got rid of one more.
III. THE NEW BOSSES: HOW MUCH DO THEY STRIP, HOW SOON DO THEY FLIP?
One point most insiders are taking for granted is that there is no such thing as an investment banking group that does not yearn to liquidate some assets immediately. Everyone in the world expects a quick sale of the paper's extensive downtown real estate holdings, some five blocks in the neighborhood of the Metrodome. Economics reporter Mike Meyers thinks the parcels will fetch $100 million or more. "If you want to be comforted," he said, "the real estate should be comforting. That sale could give them a serious return very quickly. This land is more valuable than it used to be, whether the stadium's built there or not.
"[Avista] could run it for a while, skim off some cream, and everybody lives happily ever after. I'm not that worried about this sale. I'm worried about the next sale, to a company that won't have a ready asset like that land to sell."
But most people presume there will be cutting at the paper, too. A January 6 Wall Street Journal profile of Avista sketched in some additional background about the buyers and the deal: "Thompson Dean and Steven Webster have been well known in the buyout community for more than a decade. They ran a group that generated returns of about 50 percent from buyout investments for Donaldson, Lufkin & Jenrette, which was acquired by Credit Suisse in 2000.... Avista hasn't said how much of its fund's own cash it will use for the purchase price and how much of it will come from debt it will pile on the paper."